Net Metering

Summary

NOTE: In January 2018, National Grid (now RI Energy) filed approval of its revised net metering tariff to include the changed adopted by RI legislation to expand community solar (remote net metering) to include educational institutions, hospitals, and non-profit corporations. It also removes the 30 MW cap on maximum aggregate amount of remote net metering for public entity facilities, multi-municipal collaboratives, educational institutions, federal government, hospitals or nonprofits.

Rhode Island allows net metering for systems up to ten megawatts (MW) in capacity that are designed to generate up to 125% of the electricity that a home or other facility uses. Net metering is available to residential customers (defined as customers on the A-16 Standard Residential or A-60 Income-Eligible Residential rate code) and commercial & industrial customers (defined as any non-residential customer). For C&I customers, the system can be self-owned or third-party owned and operated by a developer on the customer's behalf. The net metered systems size must be sized to produce no more than an average of previous or forecasted three years of annual consumption of the energy at the account. Systems that generate electricity using solar energy, wind energy, ocean-thermal energy, geothermal energy, small hydropower, biogas from anaerobic digestion, or fuel cells using any of these energy sources are eligible. All customers of electric distribution companies including public entities of the state are eligible. The aggregate amount of net-metered systems in Block Island Power Company is capped at 10% of the peak load and in Pascoag Utility District is capped at 3% of the peak load, as determined by the Public Utilities Commission.* In 2014, the aggregate cap for net metering for National Grid (now RI Energy) was eliminated. Net metered systems may be owned by the customer or be financed by a third party through a lease or power/credit purchase agreements. A third party engaged in financing net metered systems is not considered a public utility.

Net Excess Generation:

The rate credited for kilowatt-hours (kWh) generated that do not exceed the customer's kWh consumption for that billing period is equal to the utility's retail rate (minus a very small conservation charge per kWh). Any excess kWh generation that exceeds 100% but limited up to 125% of the net-metering customer's usage during the billing period will be paid excess renewable net-metering credits which is equal to the utilities avoided cost rate, which is calculated as electric distribution company's last resort service kWh charge for the rate class and Time of Use billing period, if applicable. The excess credit may be carried forward to the next bill or purchased by the utility (at its discretion). To facilitate the administration of billing, utilities may estimate a net-metered customer's generation and consumption over a 12-month period. Otherwise, the rates (including customer charges and demand charges) that apply to a net-metered customer must be the same rates that would apply if the same customer were not net metering. Utilities may not impose any other charges on the net-metered customers. Net-metered customers are exempt from backup or standby rates commensurate with the size of the net-metered system. Utilities may recover the costs of program administration through rates.

Meter Aggregation:

A system generally must be owned by the customer of record and sited on the customer's premises (in the same geographic location). However, facilities (1) owned by public entity** or multi-municipal collaborative or (2) owned and operated by a developer on behalf of the public entity or multi-municipal collaborative through “public entity net metering financing arrangement”*** are eligible for virtual net metering. Eligible entities include state agencies, quasi-state agencies, municipalities, public housing authorities, public schools, private schools, non-profits, federal government, and hospitals.  Remote public entity and multi municipality collaborative that apply for virtual net metering after December 31, 2018 will cease to receive distribution kWh credit beginning January 1, 2050. Meter aggregation is generally allowed, and special provisions exist to accommodate meter aggregation for farm-based systems that serve facilities in close proximity to each other.

Community Remote Net Metering:

H.B. 8354, enacted in June 2016, authorizes community remote net metering in the state.

Rate Design and Cost Allocation study

S.B. 81, enacted in June 2015, requires the Public Utilities Commission (PUC) to consider rate design and distribution cost allocation among rate classes taking into account the effects of net metering and increasing distributed energy resources. The PUC, in effect, established Docket 4545 and required the electric utilities are required to file revenue-neutral allocated cost of service study of all rate classes and propose new rates for all customers in each rate class. On January 2016, the PUC approved National Grid’s request to withdraw their proposed rate change filing, determining that no rate revision was required at this time. The PUC however, determined that it was important to continue to review the issues raised in the proceeding, including rate design, net metering, and effects of distributed generation on the grid. The proceeding can be accessed at Docket 4600.

*Block Island Utility District's credit rate is similar to a feed-in tariff. Pascoag Utility District has a net metering program, but few customers are enrolled.

**A "public entity" is defined as the municipalities, wastewater treatment facilities, public transit agencies or any water distributing plant or system.

**A "public entity net metering financing arrangement" is defined as an arrangement between a public entity or multi-municipal collaborative and a private entity to facilitate the financing and operation of a net-metered system. Such systems are owned and operated by the private entity and must be located on property owned or controlled by the public entity or one of the municipalities.